Fab.com on track to make $100m in sales in 2012

Online design retailer Fab.com is
on track to take more than $100m (£63m) in sales in 2012, having
only launched in February 2011, according to founders Jason
Goldberg and Bradford Shellhammer.

The company famously pivoted from being a social networking site
with 150,000 users to an "Amazon.com for design" last year. "We
didn't want to spend another dollar or another day working on
something we didn't believe in," said Goldberg, speaking at the London Web
Summit.

They shut down the old business and developed a new vision for a
design retailer with discoverability at its heart. "A lot of the
time people don't know what they need and just want to discover,"
Goldberg added.

They put up a splash page on Fab.com announcing that a new daily
design and inspiration service would launch with discounts of up to
70 percent. They had 50,000 members join within the first 30 days
based solely on that splash page.

"We then got scared because we had no sales launch until June,"
Goldberg explained. As a result the team built an inspiration wall
that let people upload pieces of design that they loved. "We were
giving people something to do while they waited for our sales to
start," he added. By June they had 165,000 pre-launch subscribers
who had invited 500,000 people.

On the first day they took more than $65,000 (£41,000) in sales.
They had convinced designers including Milton Glaser, the creator
of the original I love New
York design, to sell products through Fab.com. Within a month
of launching, Fab had doubled its membership to 350,000 members and
had closed a funding round.

"In August 2011 we realised we weren't in the design sales
business, but in the business of making people smile every day. We
decided we'd be guided by emotion first. Our job is to wow and
excite them. We look at products that wow people first and sales
second. If we get people to share products on Facebook or Twitter, the sales will happen over
time," Goldberg said.

The company got more than a million members by November 2011 and
is now running more than 30 flash sales events every day. It raised
an additional $40 million (£25m) in December to expand and acquired
German design site Casacanda in February, rebranding it as Fab.de.
In the last month it has doubled both membership and sales.

Since January 2012, Fab has grown its total membership from 1.5
million to 3 million. 50 percent of new members have come from
social sharing. "You can't force that to happen. This is not about
spamming people's address book but people taking the initiative to
share," said Goldberg.

Forty percent of the company's daily logins come from mobile,
with iPad users being especially
valuable members -- they have twice the lifetime value of web users
and ten percent of all iPad users on Fab convert to purchase in the
first week of having the iPad app.

"We have had nine months of sales, and sold one million products
as of 12 March. That's 111,111 per month, 2.6 per minute," said
Goldberg. "For a company that didn't exist a year ago, it's
phenomenal."